Economist 4/22/15

  1. Tesco,Britain’s biggest retailer announced its financial results on April 22nd. It made the largest pre-tax loss, of £6.4 billion ($9.6 billion), in British retail history, eight times as much as the previous record, set by Morrisons last year. This was also the sixth-largest loss in the country’s corporate history. Most of it (about £4.7 billion) was accounted for by the fall in the property value of its British stores, reflecting how its out-of-town hypermarkets have fallen out of favour with consumers who shop online or use smaller convenience stores. its foreign operations are remarkably robust. Profits in Tesco’s Asian operations only fell by 15% year-on-year, and in Europe by 32%, compared to a whopping 79% for its British stores. The performance of the 3,000 or so British stores remains his biggest headache. Once the core of Tesco’s money-making machine, in the last six months of last year they hardly made any profit at all.Since early 2011 they have been losing market share, mainly to the much cheaper German-owned discount stores Lidl and Aldi.
  2. Vietnam’s 40m internet-users live in one of the better-connected countries in South-East Asia. Around 45% of Vietnamese are online (roughly the same proportion as in China). In the region, only Malaysia and Singapore have higher penetration rates. The use of social media has leapt—by two-fifths in the past year alone, according to one estimate.Vietnam patrols the internet with a relatively light touch.Facebook is the country’s most-visited website, ahead of Google’s search engine. Attempts to block it have been sporadic and half-hearted. Yet this does not mean there is free speech online. The party controls dissent by using vaguely-written laws—recently strengthened—to imprison bloggers and to impose fines on outspoken users of social media.
  3. Seven years ago the central government in Japan began allowing city residents to divert a proportion of their income-tax payments to a furusato or hometown tax of their choice. The response has been overwhelming. In the last fiscal year rural towns earned ¥14 billion ($1.2 billion) from such contributions. Some people choose a furusato not on the basis of any family ties, but simply because they like the area.Shrewd self-promotion by local governments has helped attract furusato money. Some have set up websites offering generous gifts of marbled beef, exotic seafoods and other goodies in return for a share of urbanites’ taxes. The biggest earner from the contributions, the town of Hirado in Nagasaki prefecture, has a glossy brochure of the local foods it promises to send as gifts.The central government has tried to crack down on the most lavish handouts, such as the gold ninja throwing-knives worth ¥400,000 that one city was offering in honour of its ninja spies.many towns were giving back in freebies half or even more of the value of the tax contributions they were raising.
  4. Under China’s household-registration system, known as hukou, rural connections, even if inherited, determine the kind of welfare benefits individuals may receive. Some of the first generation of migrant workers, who arrived in urban areas in the late 1980s, have reached retirement age. Most people can qualify for a state-supported or employer-backed pension scheme at 60; some women can do so at 55 or even 50. For city-born workers, that means nearly 2,070 yuan a month. But workers of rural origin receive far less—not nearly enough, in most cases, to sustain them in the cities in which they have been working. From 2008 to 2013 the number of such people over the age of 50 jumped from 26m to 41m, or from 11% to 15% of the migrant workforce. The ageing of China’s population will accentuate the problem.The minimum basic pension is 55 yuan (about $8.85) a month, far below the poverty line. The government says it increased rural pension benefits in 2014 by an average of 15 yuan per month. But increasing benefits substantially will be difficult as the ratio of pensioners to working-age migrants increases.
  5. Unlike the three Republicans who have declared so far (Marco Rubio, Rand Paul and Ted Cruz), Hillary Clinton declined to hold a rally to kick off her campaign. Instead, the former secretary of state tweeted and then uploaded a short video to a new website, in which she appeared with several Iowans who talked about their dreams for the future. After years of jet-setting, courting wealthy donors and giving $300,000 speeches, Mrs Clinton worries that she may be perceived as elitist. Smaller events, like these in Iowa, from which the press are largely excluded and at which carefully vetted regular folks are allowed to speak, help her to soften that impression. This show is necessary partly because Mrs Clinton faces no serious competition for the Democratic nomination. Mrs Clinton is thus working hard for votes that she seems assured of getting in almost any circumstances.

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